U.S. power use tumbling with recession

[David A. Kates]

Reuters
Mar 30, 2009
By Scott DiSavino and Eileen O'Grady

NEW YORK/HOUSTON - U.S. electricity demand will continue to shrink in 2009 as the economic meltdown hits industrial power consumption, but a rebound could come in 2010. Bigger houses, a myriad of electric devices and an expanding economy have kept U.S. power use on a nearly uninterrupted climb for 25 years - until the recession put the brakes on industrial demand in 2008. Electricity sales to industrial customers are expected to shrink 6.4 percent this year, leading to an expected 1.7 percent drop in overall power consumption in 2009, the U.S. Energy Information Administration said in its most recent outlook. EIA expects the downturn to reverse course in 2010, with 1.2 percent growth in electric output as the economy slowly returns to life. On Monday, American Electric Power Co Inc, with customers in 11 states, cut its 2010 capital budget by nearly half, to $1.8 billion from $3.4 billion, and pared its 2009 profit outlook, citing weak industrial demand. The financial crisis is delaying investment in energy infrastructure at the same time new environmental mandates are requiring substantial increases in renewable generation and transmission.